Close this search box.

Going All In With Peak Fossil Fuels by 2030: The International Energy Agency bets its reputation on an aggressive prediction

Excerpt: Earlier this week the International Energy Agency (IEA), headquartered in Paris and overseen by the OECD, issued a bold prediction in its 2023 World Energy Outlook (emphasis added):

The combination of growing momentum behind clean energy technologies and structural economic shifts around the world has major implications for fossil fuels, with peaks in global demand for coal, oil and natural gas all visible this decade – the first time this has happened in a WEO scenario based on today’s policy settings. In this scenario, the share of fossil fuels in global energy supply, which has been stuck for decades at around 80%, declines to 73% by 2030, with global energy-related carbon dioxide (CO2) emissions peaking by 2025.

Some found the prediction objectionable. For instance, upon release of the report the Premier of Alberta, Canada said the IEA had become politicized and was engaging in political advocacy:

Alberta Premier Danielle Smith is calling one of the world’s premier energy research institutions “no longer credible” after it released a report saying fossil fuel demand is likely to peak this decade.

Smith says the International Energy Agency no longer does analysis, it points to outcomes it wants and outlines paths to get there.

She is not alone. Saudi Energy Minister Prince Abdulaziz bin Salman said last month:

“They’ve moved from being a forecaster and assessors of market to one for political advocacy. That’s their choice.”

Similarly, Omar Farouk Ibrahimar, secretary general of the African Petroleum Producers’ Organization said:

“We know for sure that IEA will say everything it can say in order to scare the world from investing in fossil fuels”

Conflict over the IEA’s latest World Energy Outlook matters because the IEA, created in the 1970s to focus on oil, has evolved to serve as one of the world’s preeminent institutions providing global energy analyses to global decision makers.

The IEA has made a significant bet on peak fossil fuels and its reputation hangs in the balance. Here are the implications:

  • If the peak occurs by 2030, the IEA will be celebrated as going out on a limb and being correct, solidifying its position as the preeminent international body for energy system analyses.
  • If the peak does not occur by 2030, fossil fuel interests will say we-told-you-so and legitimate questions will then be asked about the politicization of the IEA’s analyses. The world needs more fair-minded science arbiters and honest brokers, as it has plenty of energy policy cheerleaders.
  • In either case, IEA’s issuance of the peak-fossil fuel forecast has created strong incentives for the organization to act as an advocate, because of the two possible outcomes above. Rooting for your own forecast is not a good situation to be in for a science advisory body — it is also the reason why we think it a bad idea to let referees bet on the games that they are officiating.